Random Option plays on Market Update stock plays

[jlhooter]

Bought CALL WAL-MART STORES INC $110 EXP 01/19/24 for $24

Another approach for gain is to sell back the call. For 20% gain, you would need to sell the call when it hits $28.80. As of this writing the avg premium is $25.83 or you already have a 7.6% gain. Of course I am ignoring the fact that short-term changes doesn't matter too much since it could change drastically in a couple of days.

Another approach for gain is to sell a covered call with a higher strike price against your low strike purchased call. You can swing trade this short call... Hypothetically, sell a $150 Jan-2024 when you can get $10 for it and buy it back when you can buy it back for $7.50... You could probably do this several times between now and Jan-'24. (The short call you sell is covered by the long call you purchased, make sure you don't sell the long call before buying to close the short call or you put yourself in a position of naked shorting with potential unlimited loss.)

Eric,
Mind blown!!!
So, because I did a LEAPS, I technically can do a covered call on that purchase???
In your hypothetical example you are saying I could sell a CALL (Jan 2024, $150 Strike which is going for ~$8.50) and it is not on margin because it is viewed as if I 'own' the shares? If I understand this correctly, this is insane!! And, I get what you mean by buying the Short CALL back, rinse and repeat. That is some fun $hit if I get you.
Please tell me I understood you correctly and thanks.

[Eric]

Eric,
Mind blown!!!
So, because I did a LEAPS, I technically can do a covered call on that purchase???
...
Please tell me I understood you correctly and thanks.

Yes, you understand me correctly (but it doesn't have to be a LEAP; you could run the same strategy on weeklies).

You could even sell near dated short calls against your far dated long call.... Sell a June 17th $135 call against your Jan-'24 $110 call. That's called a diagonal spread as it combines a vertical spread (different strike prices) with a calendar spread (different expiration dates). Because the long call you bought is American-style it can be exercised any time including on June 17th if needed to cover the exercise of a short call you sold against it.

[SOL]

Bought CALL WAL-MART STORES INC $110 EXP 01/19/24 for $24

Another approach for gain is to sell back the call. For 20% gain, you would need to sell the call when it hits $28.80. As of this writing the avg premium is $25.83 or you already have a 7.6% gain. Of course I am ignoring the fact that short-term changes doesn't matter too much since it could change drastically in a couple of days.

Another approach for gain is to sell a covered call with a higher strike price against your low strike purchased call. You can swing trade this short call... Hypothetically, sell a $150 Jan-2024 when you can get $10 for it and buy it back when you can buy it back for $7.50... You could probably do this several times between now and Jan-'24. (The short call you sell is covered by the long call you purchased, make sure you don't sell the long call before buying to close the short call or you put yourself in a position of naked shorting with potential unlimited loss.)

Eric,
Mind blown!!!
So, because I did a LEAPS, I technically can do a covered call on that purchase???
In your hypothetical example you are saying I could sell a CALL (Jan 2024, $150 Strike which is going for ~$8.50) and it is not on margin because it is viewed as if I 'own' the shares? If I understand this correctly, this is insane!! And, I get what you mean by buying the Short CALL back, rinse and repeat. That is some fun $hit if I get you.
Please tell me I understood you correctly and thanks.

What Eric is talking about is essentially spread trading. You sell a call and buy a call and depending on whether you get a credit or not it is either a debit spread or credit spread.

I prefer creating my own spreads but the above strategy and the way Eric describes is it a good way to make extra money without too much work. Buy the covered cal back everytime the market drops.

I use a combo of the following selling puts on down days, buying them back on up days. Selling covered calls on up days buying the back on down days. Yes this is some Fun $hit

Now imagine what you can do with customized spreads once the trend stabilizes. You sell a put and use the funds to purchase a call for essentially free. Now you make a fixed income from the put sold and unlimited from the call you bought

When you think the markets are headed lower, you sell covered calls and use some of the premia to purchase far out of the money puts, again essentially for free. You and others will soon master ways to almost print money, something the big boys do all the time. Now you get a deeper insight into why volatility is a trader's best friend and with the powerful minds, we have here. we are very close to creating an open-source type code for investing but the source will not be open to everyone, meaning outsiders lol, otherwise the strategy will be diluted. Hence restricting it Tactical Investors will not corrupt the system

[Yodean]

we are very close to creating an open-source type code for investing but the source will not be open to everyone, meaning outsiders lol, otherwise the strategy will be diluted. Hence restriction it Tactical Investors will not corrupt the system

Indeed, the Auric Frequency of the Wheelers must be protected at all costs.

[LoriPrecisely]

https://youtu.be/HraaYH-sJBI

Interesting his statement, "....corporation called the USA".

I think there is truth there!

[Yodean]

Interesting his statement, "....corporation called the USA".
I think there is truth there!

_Wall Street_ is a true classic - although exaggerated for entertainment purposes, it gives some insights into how some of the PTBs play the markets.

Also, Oliver Stone directed and co-wrote _Wall Street_. The same dude who did _Ukraine On Fire_. His work is highly recommended, generally.

[Budge]

Interesting his statement, "....corporation called the USA".
I think there is truth there!

_Wall Street_ is a true classic - although exaggerated for entertainment purposes, it gives some insights into how some of the PTBs play the markets.

Also, Oliver Stone directed and co-wrote _Wall Street_. The same dude who did _Ukraine On Fire_. His work is highly recommended, generally.

His JFK is still referred to as "looney" but as more info drips out...maybe not.

[LoriPrecisely]

I am having fun with buying and selling options on ASAN. There is a lot of volume and upward price action right now. I have a question.

ASAN 07/15/2022 25.00 Put is selling for 4.55
Current market price is 24.11 on an upward trend, with a lot of volatility.

So, if I Sell to Open this Put, if the market price is 25.00 or less at expiry, I will have to buy it for 25.00 a share. But, if market price is above that, I just let the option expire. Correct?

Even the 22.50 Put for this same expiry date is selling for 3.00.
This seems like, just as Sol said, a money printing machine.

I already sold 2 Puts this morning, 17.50 and 20.00, for 1.30 and 2.30 respectively, for June 17 expiry.
Am I missing something here? This seems to good to be true.

[SOL]

I am having fun with buying and selling options on ASAN. There is a lot of volume and upward price action right now. I have a question.

ASAN 07/15/2022 25.00 Put is selling for 4.55
Current market price is 24.11 on an upward trend, with a lot of volatility.

So, if I Sell to Open this Put, if the market price is 25.00 or less at expiry, I will have to buy it for 25.00 a share. But, if market price is above that, I just let the option expire. Correct?

Even the 22.50 Put for this same expiry date is selling for 3.00.
This seems like, just as Sol said, a money printing machine.

I already sold 2 Puts this morning, 17.50 and 20.00, for 1.30 and 2.30 respectively, for June 17 expiry.
Am I missing something here? This seems to good to be true.

In general, when I am selling a put I sell slightly out of the money puts depending on how the stock looks on the daily and weekly. When it comes to selling puts I do use the daily charts and I only sell puts on down days and vice versa.

In terms of money printing machine, if you focus on stocks that are trending upwards and only on stocks you don't mind owning then it is akin to printing your own money, the same applies to selling covered calls. Though the key is to only sell puts on stocks you would not mind owning. So you are sitting on a win-win hand. This is something that do not want you to know out there. You seemed to have grasped the concept quite fast. Congrats

[AstuteShift]

Selling puts on stocks you want is a win win

Currently doing that on HIMX and others.

Since we know the trend is up, it’s a great strategy and also very easy to do however this for advance traders

SOL provides the tools and insights however all of you have to do the work on your own. That’s what’s trading is all about

United we lose, divided we rule the roost. Options when used correctly can amplify your returns and lower your risk

[LoriPrecisely]

Selling puts on stocks you want is a win win

Currently doing that on HIMX and others.

Since we know the trend is up, it’s a great strategy and also very easy to do however this for advance traders

SOL provides the tools and insights however all of you have to do the work on your own. That’s what’s trading is all about

United we lose, divided we rule the roost. Options when used correctly can amplify your returns and lower your risk

This forum is a great place for us newbies to learn from you more experienced players. That is what life is all about.

[LoriPrecisely]

I am having fun with buying and selling options on ASAN. There is a lot of volume and upward price action right now. I have a question.

ASAN 07/15/2022 25.00 Put is selling for 4.55
Current market price is 24.11 on an upward trend, with a lot of volatility.

So, if I Sell to Open this Put, if the market price is 25.00 or less at expiry, I will have to buy it for 25.00 a share. But, if market price is above that, I just let the option expire. Correct?

Even the 22.50 Put for this same expiry date is selling for 3.00.
This seems like, just as Sol said, a money printing machine.

I already sold 2 Puts this morning, 17.50 and 20.00, for 1.30 and 2.30 respectively, for June 17 expiry.
Am I missing something here? This seems to good to be true.

In general, when I am selling a put I sell slightly out of the money puts depending on how the stock looks on the daily and weekly. When it comes to selling puts I do use the daily charts and I only sell puts on down days and vice versa.

In terms of money printing machine, if you focus on stocks that are trending upwards and only on stocks you don't mind owning then it is akin to printing your own money, the same applies to selling covered calls. Though the key is to only sell puts on stocks you would not mind owning. So you are sitting on a win-win hand. This is something that do not want you to know out there. You seemed to have grasped the concept quite fast. Congrats

Thank you, Sol for your quick expert response. I went ahead and sold these two Puts this morning. I am speculating, guessing, hoping, (dare I say it) gambling, that ASAN won't be at 25. on July 15th. If it is, I will either buy the shares, or buy to close. And, buying shares would really be at 20. a share, as I received 5.00 a share in premium for the Put.

I have 2 Calls out on Asana, that is all I can do because that is all I own currently.
I have 1 Call out on Match.

And, that is the extent of my knowledge right now. I feel like I know about 10% of what there is to learn about options.

I read all of the conversations about LEAP's and spreads, but I still don't understand them enough to execute. Even buying calls with far out expiration and then selling calls against them, I don't grasp yet. But, I am learning, and I thank everyone for your contributions and expertise, and sharing of your vast knowledge and experience.

[harryg]

Thank you, Sol for your quick expert response. I went ahead and bought these two Puts this morning.

Do you mean you sold them, ie: sell to open?

If you are intending to be fully cash-secured, make sure you have enough $$$ to cover (4 lots if I read correctly).

You are doing it the best way, practising on smaller amounts to get a feel for it.

The other stuff will come if you want, there's no rush

AMZN will become a bit more affordable on Monday...

[SOL]

Thank you, Sol for your quick expert response. I went ahead and bought these two Puts this morning.

Do you mean you sold them, ie: sell to open?

If you are intending to be fully cash-secured, make sure you have enough $$$ to cover (4 lots if I read correctly).

You are doing it the best way, practising on smaller amounts to get a feel for it.

The other stuff will come if you want, there's no rush

AMZN will become a bit more affordable on Monday...

I am sure she sold them based on the premium she received. I terms of premium ASAN does pay quite handsomely but has to be nimble. I would not hold until the end. I buy when i am showing a decent gain.

[LoriPrecisely]

Yes, SOLD. Sorry, my mistake. I corrected previous post.
Okay, I will not hold until expiry.
I have an ASAN Call expiring June 17 that has already reduced to a 10. Ask, if I want to buy it back to free up those shares for a more lucrative Call.
I was just reading through the other posts discussing percent gain to be content with.

ASAN is the best stock for option trading I have found so far. A lot of lower priced stocks I have looked at don't have enough volume and some don't have any bid prices, so they don't get filled.